After reading this thread, I'm wondering if maintaining (or increasing) an allocation to REITs may actually be a good contrarian play. If everyone is pricing in doom-and-gloom for the real estate sector's ability to raise rents and increase net operating income that can be distributed to investors, then this may be a good entry point. When I see private equity firms like Blackstone buying out publicly traded REITs at a 25% premium to their current market valuation, it suggests the market as a whole is underpricing the sector.... It's hard for me to make a case that REITs are fully valued (or over-valued) and therefore now is the right time to rotate out of this asset.
I place a high value on the income REITs produce and the opportunity to redeploy those distributions in future periods. Perhaps this is a bit of market timing, but I am of the opinion that stocks are fully valued and expected market returns are too low, and therefore could suddenly rerate at a lower level if long-term treasury yields rise and corporate tax rates rise. Right now I see tactical value in lower-duration assets that provide good inflation protection and stable distributions that can be reinvested in future periods.... REITs fit in nicely with my objectives.
I place a high value on the income REITs produce and the opportunity to redeploy those distributions in future periods. Perhaps this is a bit of market timing, but I am of the opinion that stocks are fully valued and expected market returns are too low, and therefore could suddenly rerate at a lower level if long-term treasury yields rise and corporate tax rates rise. Right now I see tactical value in lower-duration assets that provide good inflation protection and stable distributions that can be reinvested in future periods.... REITs fit in nicely with my objectives.
Statistics: Posted by sphinx2020 — Sun Aug 18, 2024 4:48 pm — Replies 32 — Views 1957